China: Time for New Approach in Renewable Energy

2018-05-25

The development of renewable energy in China has attracted global attention in recent years. At present, China leads the world in terms of wind and solar power capacity. And with large-scale industrial applications, the costs have fallen substantially, according to an article from World Economic Forum.

The success of China’s renewable energy drive fully illustrates the effectiveness of China’s on-grid tariff subsidies. The advantage of the on-grid tariff policy – through which the government can make renewable energy production more competitive and attractive to businesses and investors – is that it anchors the revenue of power generation throughout the entire life cycle. In this way, it conveys a clear price signal to investors, and can effectively support the early stages of renewable energy development.

However, alongside the rapid expansion of installed capacity, the total amount of renewable subsidies is also mounting rapidly.